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A New Course for Economic Liberalism

Neoliberal economics has reached a breaking point. As a result, the traditional left-right political divide is being replaced by a split between those seeking forms of growth that are less inclined toward extreme concentration of wealth and opportunity and those seeking to end such concentration by closing open markets and societies.

GENEVA – Since the Agrarian Revolution, technological progress has always fueled opposing forces of diffusion and concentration. Diffusion occurs as old powers and privileges corrode; concentration occurs as the power and reach of those who control new capabilities expands. The so-called Fourth Industrial Revolution will be no exception in this regard.

Already, the tension between diffusion and concentration is intensifying at all levels of the economy. Throughout the 1990s and early 2000s, trade grew twice as fast as GDP, lifting hundreds of millions out of poverty. Thanks to the globalization of capital and knowledge, countries were able to shift resources to more productive and higher-paying sectors. All of this contributed to the diffusion of market power.

But this diffusion occurred in parallel with an equally stark concentration. At the sectoral level, a couple of key industries – most notably, finance and information technology – secured a growing share of profits. In the United States, for example, the financial sector generates just 4% of employment, but accounts for more than 25% of corporate profits. And half of US companies that generate profits of 25% or more are tech firms.

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I wouldnt assume that the current hotdoggers will remain the flagbearers they currently are, sooner or later wages in the hotdoggers as those corps move to product maturity will be squeezed and then all hell will break loose because simply governments will not have the tax revenue flows yet will face exponential function social costs. Governments will not just sit by, they will be forced to do something and that something will not be what the hotdoggers like, not one bit. The very simple rule is mature products migrate to lower cost territory either domestically or overseas. The hotdoggers cannot exist on their own, they need the rest of society to function and that will come to bear. Furthermore you are not looking a highflyers what you are really looking at is widespread real income decline for the majority which will cause problems in a consumer society, the very consumer base the hotdoggers require. The simple adage is you can only bring the price of something down and it is near impossible to put it up and that will apply to labour. I actually do not see anything liberal in what has been going on, it is simple raw visceration by cannibal capitalism. Its positively 19th Century digitally enabled.

"Both sides challenge the old orthodoxies; but while one seeks to remove the “neo” from neoliberalism, the other seeks to dismantle liberalism altogether."

There is a third option that is less destructive than both the "kinder gentler" alt-liberalism proposed here, and right wing anti-liberalism which wins by default in some places. That third option is fairly old fashioned social democracy backed by state sovereignty - the traditional arch enemy of the 1970-2000's vintage neoliberal development.

Their vision is regressive in a certain sense- return to an era where government actively counteracted the interests of big business on behalf of middle and lower income constituents, and by doing so, was able to successfully generate both prosperity and social stability (in the positive sense, not a euphemism for preventing advances in racial and economic equality).

The observations made in this article are wonderful. But the "smarter regulations" proposed all require an answer to the problem of "regulatory capture" - and that answer is state sovereignty, with accountability and responsiveness to individual flesh-and-blood constituents weighted higher than accountability and responsiveness to non-human constituents. That means the property rights the non-human constituents are able to claim under the legal frameworks set up in the "golden age of neoliberalism" must be turned back, in favor of flesh-and-blood constituents.

You are ignoring the elephant in the room with all due respect Mr. Buckup. As long at the winners of "Globalization" own the policy makers outright whether through "Campaign Donations" or straight out bribes. Which means the policymakers are NOT honest dealers as you presuppose but merely extensions of the winners who DO NOT want any change at all. And unless this changes nothing else will.